VC-backed Deezer pulls high-profile IPO

Greg Gille
28 October 2015

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French music streaming platform Deezer, backed by a number of investors including Idinvest Partners and CM-CIC Capital Privé, has postponed its much anticipated IPO in Paris.

Deezer made the announcement on 28 October and has not indicated if or when it would attempt to list again. It did not expand upon the reasons for the postponement beyond "market conditions". The short statement read that Deezer would "review its fundraising options in the future" and that the company remains "well funded and well positioned".

Deezer initially expected to start trading on Euronext Paris on 30 October, after pricing its IPO on 27 Ocotber. In mid-October it set an initial price range of €36.40-49.24 per share.

Based on the initial range, the company would have raised between €290-405m via the issue of new shares. The overallotment option would have allowed selling shareholders to reduce their holdings, reaping up to €61m based on the upper end of the initial price range.

Deezer is currently owned by a group of minority shareholders that entered its capital structure at various funding stages. The investment holding Access Industries, also the current owner of Warner Music Group, holds a 36.72% stake in Deezer. Mobile operator Orange, a partner of Deezer in France since 2010, owns a 14.56% interest.

French GPs Idinvest and CM-CIC are the fourth and sixth largest shareholders with 12.9% and 5.3% stakes, respectively. Additional shareholders include entrepreneurs Daniel Marhely and Xaviel Niel, as well as music multinationals like Sony, Warner and Universal.

Created in 2007, Deezer is an on-demand music streaming service. Its catalogue, featuring more than 35 million tracks and 40,000 podcasts, is browsed by 6.3 million users worldwide – 1.5 million of whom are direct subscribers, while the remaining 4.8 million access the content via one of the telecom operators Deezer is partnered with.

With headquarters in Paris, the company operates out of offices in 11 additional European countries, as well as the US, Mexico, Colombia, Brazil, Thailand and Singapore. Its activities worldwide generate €142m in turnover, a 53% uptick on the 2013 figure.

According to unquote" data, Deezer first came under private equity ownership in October 2009, two years after being founded. The streaming service raised €6.5m from Idinvest, CM-CIC and existing investor Dotcorp Asset Management to finance global expansion, which kicked off when offices were set up in the UK.

A €100m second round took place in October 2012. The funding, led by Access Industries' €70m contribution, also featured capital from Idinvest, CM-CIC, Orange and Dotcorp.

The larger equity ticket for Deezer came as the company's internationalisation accelerated. Having announced a strategy to enter 200 countries in 2011, the business became available in Canada, Australia, New Zealand and Colombia the following year.